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A friend recently left his job at a global advertising firm to take the No. 2 position at an online-media startup in the hills outside Los Angeles. To secure the position, he took a pay cut and joined immediately. He bunked with the founder in the back of the startup’s warehouse office while his wife packed up their Chicago home and eventually set up house in Los Angeles. She didn’t need to bother. He is never home. He is working 18-hour days, seven days a week. He has a boatload of founder’s stock and is shooting for a golden exit.

The chief innovation officer of a Fortune 1000 company relocated to a Silicon Valley outpost far from her New York corporate headquarters. She now spends most of her time holding court with venture capitalists and entrepreneurs about stakes in hot startups. It is never clear who is courting whom in those meetings, though the general attitude in the Valley is that there is more dumb money than good startups. Her goal is not to maximize financial returns on her investments—even a 200% return would not be material to her corporation’s financials. Instead, she is essentially outsourcing her company’s innovation strategy to startups.

Do these stories sound familiar?

Like too many of their peers, these smart and savvy veterans were stymied in their efforts to get their companies to innovate. They resigned themselves to a conventional wisdom that has taken root in recent decades: that startups are destined to out-innovate big, established businesses. Just consider, such pessimists contend, that 227 of the companies on the Fortune 500 list just 10 years ago are no longer on the list.

Based on personal experience with hundreds of large company innovation success and failures, and research into thousands more, however, I have found that this conventional wisdom just isn’t true. Or, at least, it need not be. Yes, small and agile beats big and slow, but big and agile beats anyone—and that combination is more possible than ever.

There are three reasons why innovators at large companies should be optimistic about their ability to beat startups.

1. Startups aren’t all they’re cracked up to be.

Yes, Silicon Valley has the cachet, but Harvard Business School research shows that the failure rate for startups runs as high as 95%. Startups, as a group, succeed largely because there are so many of them, not because of any special insight.

What’s more, the National Bureau of Economic Research (NBER) found that entrepreneurs are saddled with most of the risk while financiers capture most of the rewards. Entrepreneurs invest their time, reputations, and accumulated expertise for modest salaries and long hours in the hope of gaining huge rewards at “exit,” when the startup goes public or is acquired. NBER researchers found, however, that startups rarely pay off for the entrepreneurs who slave away at them. Sixty-eight percent of companies that reached an exit (after a median time of forty-nine months from first venture funding) resulted in no meaningful wealth going into the pockets of the entrepreneurs. These numbers add up to pretty long odds for corporate innovators looking to find greener pastures as an entrepreneur.

The story is not much better for strategic investors chasing startups through venture capitalists. Numerous studies, including a 2012 study by the Ewing Marion Kauffman Foundation and a more recent one by Cambridge Associates, show that venture capital has delivered poor returns for more than a decade. VC returns haven’t significantly outperformed the public market since the late 1990s, and, since 1997, less cash has been returned to investors than has been invested in venture capital. Risk and reward have not been correlated.

Vinod Khosla, a billionaire venture capitalist and cofounder of Sun Microsystems, tweeted a revealing line from an executive at one of his companies in 2012: “Entrepreneurs really are lousy at predicting the future… VCs are just as bad.”

2. Large company scale is more valuable than ever.

In the context of today’s immense technology-enabled opportunities, large companies have growth platforms that would take startups years to build. Incumbents have products with which to leverage new capabilities such as mobile devices, pervasive networks, the cloud, cameras, and sensors. Social media can amplify their brand power and customer relationships. Large companies also sit on mountains of market and customer data and are therefore in the best position to extract knowledge from big data.

The possibilities are startling. And tapping into them isn’t optional. A perfect storm of six technological innovations—combining mobile devices, social media, cameras, sensors, the cloud, and what we call emergent knowledge—means that more than $36 trillion of stock-market value is up for what some venture capitalists are calling “reimagination” in the near future. That $36 trillion is the total market valuation of public companies in the ten industries that will be most vulnerable to change over the next few years: financials, consumer staples, information technology, energy, consumer goods, health care, industrials, materials, telecom, and utilities. Incumbent companies will either do the reimagining and lay claim to the markets of the future or they’ll be reimagined out of existence.